With the pandemic, we are certainly facing a coronavirus crash in all our markets. In the next 12 to 18 months, the world is likely to see a recession. Recently, a survey was conducted to understand how prepared people are for another recession. And, the study revealed that two in every three are not really prepared. A major reason why people need to be prepared is because the economy has been extremely strong in the past few years. Luckily, there are few steps that can increase your chances of surviving the forthcoming recession.
Focus on your Current Role
First things first, you must outperform your current role. This way, you can reduce the chances of being laid off. The best way to handle recession is by holding onto your current job. And, this shouldn’t be a difficult process if your workload and job profile is healthy. Now would be the best time to demonstrate your technical skills. Engage in activities that would turn you into an irreplaceable asset within the company, and help you master the art of how to survive recession.
Focus on Networking
During tough days like a coronavirus crash, the need for networking increases by leaps and bounds. According to industry leaders, you must network to avoid the catastrophic impact of recession in your life. Irrespective of the fact that new jobs are often bagged through known contacts, 50 percent of the current population has networks that are weak and unusable.
Start becoming prepared by talking to your friends and dear ones in industries that interest you. Next, look for online communities built for your favorite jobs. In this modern, socially sound world, there is an online platform for everyone and everything. Whether it is information technology or manufacturing, you will find an online community. These groups encourage professional growth through virtual courses and one-to-one trainings.
To be more precise, maintaining a healthy social network will help you build a stronger and more reliable future.
Focus on a Side Hustle
More than 50 percent of students in Harvard are interested in starting a side gig. Undeniably, everyone wants to enjoy a secondary source of income. This is because “Plan B” will help you stay confident when something goes wrong with your primary source of income. Many digital marketers engage in consultation services after normal working hours. Likewise, people drive in ride sharing ventures to make some extra bucks.
Side gigs will help you handle the basics. Apart from training you on how to survive recession, in the long run these can become extremely lucrative.
Focus on Emergency Funds
Indeed, there will be a time when you need to shun away from luxuries and stick to emergency savings. During tough times like an economic recession, you need to have emergency funds that are worth six months of your income. In the United States, only 27 percent of people have a “perfect” emergency fund.
The best way to build an emergency fund is by cutting down on your shopping spree, avoiding expensive cable channels and steer clear of unnecessary drives. Everything but your essentials should be avoided. The money you save here will pull together a bigger emergency fund.
Focus on Your Resume
What would you do if your current job goes away? When you are laid off, things can become tricky. More than half the percentage of the country is not willing to change their current jobs. Likewise, 21 percent don’t have a resume.
During economic recession, employers are likely to release their non-essential employees. This is when unemployment increases by twofold. To survive a lay-off, and to find a new job, your profile should be updated. Ensure that your LinkedIn profile is updated with both your current role and marketable skills. A well prepared resume will help in find a job, quickly and efficiently.
Focus on Equity
Have you being dreaming of a new car? Will the economic recession caused by corona, you should consider leveraging the benefits of equity. When you stick to equity, you will have the benefit of eliminating a cheaper mortgage. Conversely, you can consider investing the funds elsewhere. The current interest rate on loans in some countries are as high as 6 percent. This clearly means you don’t need to have a hefty cap rate to boost your existing portfolio. Of course, you need to look for the right property. Work on the numbers, but don’t force a property to fit within your requirements.
When you aim for a property, look beyond the topics discussed above.
Focus on Defaults
Defaulting is often identified as a cause and effect process. In the previous crash, and economic recession, people have had to give up their homes. In some cases, the situation turns the other way.
When the economy crashes, you will have the liberty to buy stunning properties for few thousands. The market will return to normal after a certain period of time. And, when it does your property’s actual value will also return. This means you are bound to witness cash inflow.
The key take away here would be the fact that the market will return even after a coronavirus crash. This is how things work!
Focus on Divorces
Now, you might be curious to know what is the bond between divorces and recession. Well, economic recession can bring trouble into marriages, even those that look like they are planned in heaven. When the economy starts to go down, the rate of divorces will increase. Forced lockdown can get couples to get onto each other’s nerves,
The moment couples decide to split, their assets need to be divided. This is when shrewd investors start making a fortune. Divorces and settlements have to happen as quickly as possible. When the court demands for the net worth, something’s cannot be present in the form of liquid cash. Thus, properties need to be put up for sales.
Remember the old adage, one man’s junk is another man’s treasure? During critical moments like a divorce, the real estate industry sees many opportunities. In the upcoming days, more and more properties will be seen in the real estate listings.
Focus on the Fallouts
Funerals are never easy! These events are always loaded with too many emotions. Many a times, heirs are unaware of what to do about the wealth left behind. Should they split, sell or keep the wealth?
Properties dealt with can be old, or the family could be absolutely free and clear. In several cases, the net worth of the property could have increased by 20 to 25 percent. This is very common in housing markets like Brooklyn and Crooks.
Let’s understand this with an example:
A family has three heirs, and properties worth 850,000 USD. When heirs never really valued or owned the property, a payday of 250,000 USD might be at game for each heir. Funerals are never simple or cheap! Likewise, the attorney hired to handle the issues are never free.
Focus on Reduced Rate of Interest
Markets are run by simple theories that focus on the golden rules of supply and demand. For banks to make money, they should lend in the very first place. The moment an economy crashes, the rate of interest plummets down.
The science behind this is very simple. No one will be interested in lending money when they are not convinced that money really exists. In such situations, smart investors tend to see a fortune. With reduced capital, you can strength the debt-to-yield ratio. In addition to this, if you can boost your FICO score and manage a down payment – you are bound to see lucrative deals in the market.